Philequity Fund, Inc.(An Open-End Mutual Fund Company)

Financial StatementsDecember 31, 2014 and 2013and Years Ended December 31, 2014, 2013 and 2012

and

Independent Auditors Report

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SGVBuilding a betterworking world

A member firm of Ernst & Young Global Limited

APhilequity Fund, Inc

STATEMENT OF MANAGEMENT'S RESPONSIBILITYFOR FINANCIAL STATEMENTS

The management of Philequity Fund, Inc. is responsible for the preparation and fair presentation of thefinancial statements for the years ended December 31, 2014 and 2013, including the additionalcomponents attached therein, in accordance with the accounting principles generally accepted in thePhilippines as prescribed inNote 2 to the financial statements. This responsibility includes designing andimplementing internal controls relevant to the preparation and fair presentation of financial statementsthat are free from material misstatement, whether due to fraud or error, selecting and applying appropriateaccounting policies, and making accounting estimates that are reasonable inthe circumstances.

The Board of Directors reviews and approves the financial statements and submits the same to thestockholders.

Sycip, Gorres, Velayo and Co., the independent auditors, appointed by the stockholders, has examined thefinancial statements of the Company in accordance with Philippine Standards on Auditing, and in itsreport to the stockholders, has expressed its opinion on the fairness of presentation upon completion ofsuch examination.

VIOLETA O. LIDTreasurerCTC No.: 252801J

IGNACHQB. 9*MENChairman dNlYesidentCTCNb.: 131627/JanuaixOiQJManila

January 27, 2015Quezon CityTIN: 109-731-437

Signed this 4/da$of March, 2015.

TIN: 228-111-486

"Manila

SUBSCRIBED AND SWORN to me before thisexhibiting to me their Community Tax Certificates.

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LcGAS STUnit 2004-A 20/F East Tower, Philippine Stock Exchange Centre, Exchange Road, Ortigas Center, Pasig City . 5-05-36Tel. No.: 689-8080 Fax No.: 689-8066 Website: www.philequity.net EMAILA. A'.rfcha . . :in@yahoo.com

Tlw # 116-095-269-000

SGVBuilding a betterworking world

SyCip Gorres Velayo & Co.6760 Ayala Avenue1226 Makati CityPhilippines

Tel: (632) 891 0307Fax: (632) 819 0872ey.com/ph

BOA/PRC Reg. No. 0001,December 28, 2012, valid until December 31, 2015

SEC Accreditation No. 0012-FR-3 (Group A),November 15, 2012, valid until November 16. 2015

INDEPENDENT AUDITORS' REPORT

The Stockholders and the Board of DirectorsPhilequity Fund, Inc.2004-A East Tower, Philippine Stock Exchange CentreExchange Road, Ortigas CenterPasig City

Report on the Financial Statements

We have audited the accompanying financial statements of Philequity Fund, Inc. (an open-end mutualfund company), which comprise the statements of financial position as at December 31, 2014 and2013, and the statements of comprehensive income, statements of changes in equity and statements ofcash flows for each of the three years in the period ended December 31, 2014, and a summary ofsignificant accounting policies and other explanatory information.

Management's Responsibilityfor the FinancialStatementsManagement is responsible for the preparation and fair presentation of these financial statements inaccordance with Philippine Financial Reporting Standards, and for such internal control asmanagement determines is necessary to enable the preparation of financial statements that are fr